Resolve The Paradox

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Resolve The Paradox

by [email protected] » Thu Apr 24, 2014 8:17 am
Please help me with the explanation-Thanks
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by GMATGuruNY » Fri Apr 25, 2014 7:19 am
CONGRESSMAN: The wealthiest 20% of our national citizens contribute more than 70% of the total income tax revenues. This unjust burden placed upon high-salaried employees who through hard work and dedication have earned the rewards their talents command.

SENATOR: While it is true the wealthiest 20% of wage earners generate more than 70% of the total income tax revenues, the current income tax system does not impose a greater hardship upon high-salaried citizens than it does those with modest incomes.

Which of the following, if true, most helps to explain the apparent paradox in the senator’s comment above?

A. Large wage-earners generally have more opportunities to supplement their incomes through investments and tax-free accounts.
B. Many wealthy individuals have funds available to them is saving accounts that can be used to pay their income taxes.
C. The current tax code is based on democratically approved schedule of tiered rates that are applied to citizens accordingly to their total earnings.
D. Inherited fortunes, dividends and interests are all exempt from tax under the current tax system.
E. The economic disparity in this country is so great that the wealthiest 20% of workers earn 75% of the total income.
E: The economic disparity in this country is so great that the wealthiest 20% of workers earn 75% of the total income.
Here, the wealthiest people earn 75% of the total income, while the rest of the population earns the remaining 25%.
At the same time, the wealthiest people account for as little as 70.1% of the total tax collected, while the rest of the population accounts for the remaining 29.9%.
Since the rest of the population earns only 25% of the total income but accounts for a HIGHER percentage of the total tax collected, the tax rate for the rest of the population must be HIGHER than the tax rate for the wealthiest people -- explaining why the current income tax system does not impose a greater hardship upon high-salaried citizens.

The correct answer is E.
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by ranjansurianarayanan » Mon Sep 18, 2017 3:41 am
Hello Mitch,

I picked answer choice (A). Given your explanation, I do see that a little math is involved in (E) and it makes sense.

But could you please explain why answer choice (A) is incorrect.

Thanks,
Ranjan

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by GMATGuruNY » Mon Sep 18, 2017 7:11 am
ranjansurianarayanan wrote:Hello Mitch,

I picked answer choice (A). Given your explanation, I do see that a little math is involved in (E) and it makes sense.

But could you please explain why answer choice (A) is incorrect.

Thanks,
Ranjan
The conclusion is constrained to high-salaried employees who through hard work and dedication have earned the rewards their talents command.
The portion in blue is a PREMISE.
A premise is a FACT; it cannot be weakened.
Eliminate any answer choice that attempts to weaken a premise.

A: Large wage-earners generally have more opportunities to supplement their incomes through investments and tax-free accounts.
This option attempts to weaken the premise that high wage-earners earn their rewards through hard work and dedication.
Eliminate any answer choice that attempts to weaken a premise.
Eliminate A.
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by RBBmba@2014 » Wed Sep 20, 2017 2:51 am
Hi,
Is it an Official Qs ? Any idea what is the source of this CR ?